The pulmonary alveolar epithelium is prominently involved in a number of important human diseases, including emphysema, acute lung injury, and pulmonary fibrosis. In each of these conditions the capacity to generate new alveolar epithelium would be of great potential therapeutic value, but such a project remains beyond the reach of current technology. Although much progress has been made in identifying and manipulating cardiac and blood progenitor cells, progress on progenitor cell biology in the lung has been slowed by several significant challenges associated with studying the lung, including its complex anatomical structure, slow intrinsic rate of turnover, and the absence of a transplantation assay to assess the developmental potential of putative progenitor cells. In order to move beyond the limitations of current research into lung development and repair, this application will focus on the biology of the distal airway and alveolar epithelium, bringing together three investigative groups with different expertise but overlapping interests in epithelial progenitor cell biology. The first group is led by Ross Metzger, who generated the recently published detailed description of the pattern of airway branching during embryonic mouse lung formation. This work provides a framework within which to locate and define the time of appearance of alveolar progenitor cells during lung development, and raises important new questions about proximal and distal epithelial differentiation. The second group, led by Zena Werb, brings an extensive record of studying breast development and remodeling to the issues of lung development, with particular focus on the influence of the mesenchyme on epithelial progenitor cell (re)programming and the development of assays to visualize this process. The third group, led by the PI and colleagues, is creating lineage tracing reagents to facilitate the identification and isolation of alveolar epithelial progenitors, allow for the unambiguous interpretation of progenitor cell assays, and provide a means to explore the capacity of environmental cues, especially the extracellular matrix, to direct programming of adult type II cells toward multiple phenotypes. The major objectives of the project are to develop methods for the isolation and characterization of embryonic alveolar cell progenitors, compare the gene expression and developmental potential of these cells with adult type II cells, elucidate cues that reprogram adult type II cells with progenitor potential, and establish an in vivo transplantation assay to validate and screen for the capacity of progenitors to engage vascular elements and form alveolar tissue.